Today, our customers have many ways to reach us to request service or buy our products and services. The increase in social media usage and number of sites available to reach us has made it much easier for our customers to give us feedback. What this has done is raise the bar, raise our customers’ expectations as they relate to customer service platform response time, how quickly we respond to their needs, questions, issues and concerns. We can manage the customer experience, no matter how we communicate with them, by creating and implementing a customer service plan aligned with our business management and growth plans.
In their seminal article on the link between service and profit, “Putting the Service-Profit Chain to Work”, the Harvard Business Review authors found that a five percent increase in customer loyalty has the potential to deliver a profit increase of anywhere between twenty-five and eighty-five percent. This is significant. Why wouldn’t every organization seek to build a customer service plan and process that increased their profit? The companies cited by these authors were able to increase their profits, not just by improving the level of customer service they provided, but by improving the number of loyal customers they serve. They do this by carefully selecting their customers, understanding and meeting these customers’ individual needs and interests, and; often engaging these customers in delivery of the product or service. And they organize themselves into cross-functional teams where team members understand the purpose of the organization, practice behaviours and implement actions necessary to keep customers loyal. This ‘ownership mentality’ encourages team members to build relationships with the selected customers and treat them as their own customers.
Bain and Company, in their work with Fred Reichheld’s concepts in his book “The Ultimate Question 2.0”, developed and implemented The Net Promoter System to measure customer satisfaction. The results of their case studies show traditional customer satisfaction measurement tools don’t deliver because the results may not make it back to the front line employees in a timely fashion. These studies also identified that companies will not be able to… “achieve or sustain high customer loyalty without a cadre of engaged employees.”
So how do we, as business leaders and managers, create a better customer service experience? What can we take from the research shared by the Harvard Business Review authors and Bain and Company researchers that will help us to improve our customer relationships and build customer loyalty?
We can do this by building a customer service plan, a customer service plan that is an integral part of our business plan where we identify the customer market we need to develop to increase loyalty and drive up profits.
We have conducted our own research on customer service excellence with thirty Canadian organizations and, as a result of this research, we created the ‘Customer Satisfaction Practices Continuum’ – a model for evaluating the customer service level of the organization (or any unit within an organization). This continuum outlines five stages for evaluation, each stage has three components – customer focus, measurement and environment. By completing the assessment, an organization is able to quickly assess their position on the continuum and decide whether or not, they want to implement the required actions to move to the next, more effective stage. This allows business leaders and managers to balance customer service with profitability and build a customer service plan aligned with their business direction and goals with the level of customer service they feel is appropriate. Building customer loyalty can be expensive if investment in methods and action plans outstrips anticipated revenue. Customer service excellence is not about meeting every customer need but rather identifying those customers with whom we can build a relationship and providing our employees with the data, tools, processes and systems they need to continue to nurture these relationships. This will result in customer referrals, the best and least expensive method of all.
In the end, it is all about growing the business and driving up profits. One of the best ways to do this is to grow relationships between your employees and your customers as the research clearly shows that customer loyalty is indeed one of the most effective ways to drive up revenues and increase profit.